[MZ Successor] ⑤ Lotte 3rd Generation Shin Yuyeol... Entering Management

Learning Finance and Chemistry Following Chairman Shin Dong-bin
Expected to Inherit Management Rights Within 10 Years
Proving Management Skills in Hydrogen and Battery New Businesses

Editor's NoteThe new year has begun, but the business environment faced by companies remains challenging. With the arrival of the ‘3 highs and 1 low’ complex crisis?high inflation, high exchange rates, high interest rates, and low growth?companies are struggling to find solutions to overcome these difficulties. The best place to closely observe efforts to turn this crisis into an opportunity is in business leadership. It is no exaggeration to say that the rise and fall of groups depend on the choices made by the MZ generation third and fourth-generation successors who have stepped up to the forefront of management to inherit family businesses. We take an early look at the activities of these leaders who are driving corporate change by planning new businesses, pioneering markets, or improving company management systems in line with changing times.

[Asia Economy Reporter Oh Hyung-gil] At the end of last year, the biggest focus in Lotte Group’s personnel affairs was whether Shin Yoo-yeol, Assistant Managing Director of Lotte Chemical, would be promoted. He was promoted by dropping the ‘Assistant’ title and becoming a Managing Director.

He joined Japan’s Lotte in 2020, was promoted to executive the following year, and then rapidly promoted to Managing Director within a year. His promotion to Managing Director is seen as a signal for management succession. Considering that his father, Chairman Shin Dong-bin, was promoted to Managing Director and then became Vice Chairman after seven years, it is possible that Shin Yoo-yeol may inherit management rights within 10 years.

Shin completed his entire education from kindergarten through university at Aoyama Gakuin, an elite private school. Shin Dong-ju, Chairman of SDJ Corporation, and Chairman Shin Dong-bin also graduated from this school through university. Unlike his father, Shin graduated from Keio University in Japan. However, he later went to the United States and completed an MBA program at Columbia University, just like Chairman Shin.

After finishing his studies, he followed his father’s path by joining Nomura Securities in Japan. Just as Chairman Shin joined Nomura Securities in 1981 and worked there for seven years, Shin worked at Nomura Securities’ Singapore branch and then joined Lotte Holdings, the Japanese holding company of Lotte, as a department head.

Chairman Shin began his management training in 1990 at the age of 35 when he was promoted to Managing Director at Honam Petrochemical (now Lotte Chemical). Similarly, Shin was promoted to Assistant Managing Director at Lotte Chemical last year after passing through Lotte Holdings, and he is currently responsible for basic materials sales and new business at the Tokyo branch. Father and son are undergoing the same management training while traveling between Japan and Korea.

However, Shin must not only prove his management capabilities but also resolve issues related to his Japanese nationality. In particular, there is speculation that he will return after 2025, when he turns 38 and can be exempted from military service.

Shin has already begun to assert his presence in external activities. He attended the Korea-Japan Lotte Holdings exchange meeting and accompanied Chairman Shin on a business trip to Vietnam. He also participated in the Lotte-Nomura exchange meeting.

Earlier this year, he appeared at CES 2023, the world’s largest IT and electronics exhibition held in Las Vegas, USA. On the 6th (local time), Shin visited the SK exhibition hall with Lotte Chemical Vice Chairman Kim Kyo-hyun, touring the site on behalf of Chairman Shin.

It is particularly noteworthy that he started his management training at Lotte Chemical, just like his father. Considering the importance of Lotte Chemical within the group, this is somewhat natural.

Honam Petrochemical was launched as Lotte Chemical in 2012 after successively merging Lotte Daesan Petrochemical and KP Chemical. In 2015, it fully established itself as a core affiliate by acquiring Samsung Group’s chemical-related subsidiaries, including Samsung SDI’s chemical division, Samsung Fine Chemicals, and Samsung BP Chemicals.

However, last year, the petrochemical industry’s sluggish performance caused earnings to falter. Sales from the first to third quarters of last year reached 16.7802 trillion won, a 29.5% increase from the previous year, but it recorded an operating loss of 362.6 billion won, turning to a deficit. Given the complex crisis, petrochemical sluggishness is expected to continue this year, so the performance outlook is not optimistic.

Nevertheless, the company’s future looks bright. Lotte Chemical has chosen hydrogen energy, battery materials, recycling, and bio-business as core future businesses and is fostering new businesses by launching a project promotion team.

In the hydrogen sector, the company is pursuing various projects within the domestic and international hydrogen industry value chain with the goal of introducing 1.2 million tons of eco-friendly blue and green hydrogen in ammonia form domestically by 2030.

In the battery materials sector, it is conducting businesses involving key materials such as cathode foil, electrolyte organic solvents, and separator materials, and through the acquisition of Iljin Materials, it is also preparing to enter the anode foil business. Additionally, it is expanding into recycling petrochemical products such as plastic pyrolysis naphtha.

The funeral ceremony of the late Shin Kyuk-ho, Honorary Chairman of Lotte Group, was held on the morning of the 22nd at the Lotte Concert Hall in Lotte World Mall, Songpa-gu, Seoul. Shin Jeong-hoon, son of Shin Dong-joo, former Vice Chairman of Lotte Holdings, and Shin Yoo-yeol, son of Shin Dong-bin, Chairman of Lotte Group, are carrying the portrait and memorial tablet.